USD/CNH Holding Close To 2024 Highs, RSI Not Yet In Overbought Territory

USD/CNH made a marginal new high for 2024 on Tuesday (7.3093), while sitting marginally lower near 7.3070 in early Wednesday dealings. Mid Nov highs from last year came in just above 7.3100, while the Nov 3 high was 7.3309, which could be upside focus points for the pair. USD/CNY spot closed at 7.2712 for Tuesday trade, so just short of the upper daily trading limit.

• Like elsewhere, not much has changed from a broader dollar standpoint, with lower US yields coming post some mildly dovish remarks from Fed Chair Powell.
• USD/CNH remains in an uptrend, the 20-day EMA sits back around 7.2840 on the downside, the 50-day close to 7.2650. We are close to overbought territory from an RSI (14) standpoint, but haven't breached this threshold level yet.
• Focus will remain on the USD/CNY fixing, although we may see a steadier outcome today given USD indices moved down a touch in Tuesday trade.
• On the data front, we have the Caixin services PMI out today. The market expects a 53.4 print, versus 54.0 prior. The composite Caixin print will also print (prior was 54.1).
• To recap, onshore equities were marginally weaker on Tuesday (CSI 300 off 0.18%), but the Golden Dragon index rose 0.78% in US trade. Onshore bond yields edged back down, partially reversing Monday's bounce, which followed PBoC headlines on ensuring bond market stability.